METALLA ROYALTY & STREAMING (NYSEARCA:MTA) Shows Strong Technical and Fundamental Momentum

A systematic method for finding high-potential stocks joins strict technical study with fundamental growth measures. The process used here employs Mark Minervini's Trend Template to identify equities in clear uptrends, then adds a High Growth Momentum (HGM) filter to confirm these companies also display the strong earnings and sales growth typical of market leaders. This two-part method aims to locate stocks that are not only technically sound but are also supported by strong fundamental momentum, a pairing that has often come before major price gains.

Technical Strength: Following the Minervini Trend Template

METALLA ROYALTY & STREAMING LTD (NYSEARCA:MTA) presents a strong technical image that matches the requirements of the Minervini Trend Template. This template is made to sort for stocks in a clear Stage 2 uptrend, steering clear of basing or declining issues. MTA's chart shows the signs of such a trend, a key base for Minervini's strategy that states the largest winners come from existing uptrends.

A detailed view of the main moving averages and price levels shows a stock in a good technical state:

• Price vs. Moving Averages: The present price of $7.04 trades well above its rising 50-day ($6.47), 150-day ($4.65), and 200-day ($4.23) simple moving averages (SMAs). This order confirms that buyers are in charge across short, intermediate, and long-term periods.
• Moving Average Order: The 50-day SMA is positioned above both the 150-day and 200-day SMAs, while the 150-day SMA is above the 200-day SMA. This stacked, positive setup is a central part of the Trend Template, showing increasing momentum and a solid uptrend.
• Nearness to Highs: MTA's price is now within 10% of its 52-week high of $7.73, meeting the template's need to be within 25% of the high. This concentration on strength, instead of low price, helps find market leaders.
• Relative Strength: With a ChartMill Relative Strength (CRS) rating of 97.05, MTA is doing better than 97% of all stocks in the market. Minervini notes that real leaders have high relative strength, often in the 80s or 90s, as it shows institutional interest and better performance.

Fundamental Momentum: The Driver for Growth

Apart from a technically good chart, a stock needs to be pushed by strong fundamental growth to be a high-momentum candidate. MTA displays several main measures that point to improving business results, a central part of the High Growth Momentum filter.

The company's earnings and sales patterns show major improvement:

• Earnings Improvement: Quarterly EPS growth has been increasing noticeably, with the latest quarter showing a 50% year-over-year rise, after earlier quarters of 66.7% and 75% growth. This sequence of improvement is a strong sign of better profitability and operational leverage.
• Sales Growth Increase: Revenue growth is even more distinct. The last quarter had a notable 208% jump in sales compared to the same quarter last year. This fast top-line growth is a main force for high-momentum stocks and often draws major investor notice.
• Analyst Positive View: The average analyst estimate for next year's EPS has been adjusted upward by over 48% in the past three months. Such large upward adjustments are a strong positive signal, showing increasing belief in the company's future earnings potential from those who monitor it most closely.

High-Level Technical Evaluation

ChartMill's own study gives MTA a first-class technical rating of 10 out of 10, showing great health across many time periods. The report states that both long and short-term trends are positive and that MTA displays a "nice and steady pattern of rising prices," doing better than 97% of the market. While the high technical rating is evident, the report indicates the present setup quality is medium, as recent price movement may need investors to wait for a clearer consolidation time for a better low-risk entry point. For a complete breakdown of the support levels and trend study, readers can see the full technical report for MTA.

Locating Similar Opportunities

For investors looking for other companies that fit this mix of good technical trends and high fundamental growth momentum, the screening process that found MTA can be repeated. This method systematically looks for stocks that are both technically good and fundamentally improving.

You can find more possible candidates that match this strategy by using the High Growth Momentum + Trend Template screen on ChartMill.

Disclaimer: This is not investment advice. The content is meant for information and education only. It is important to do your own research and think about your financial position and risk tolerance before making any investment choices. Please read our full disclaimer and terms of use to understand our obligations.